News

World’s first low-cost carrier alliance is born

18 Jan 2016 by Clement Huang
HK Express, Lucky Air, Urumqi Air and West Air have established the world’s first low-cost carrier (LCC) alliance: U-Fly Alliance. Andrew Cowen, chief executive of HK Express, told Business Traveller Asia-Pacific that the reason it has taken so long for a low-cost carrier alliance to be established is that it goes against the fundamentals of the traditional LCC model. “The foundation of the model is to be focused on the [individual LCC’s] network, and not be distracted by other things. We very much subscribe to that,” he said. “At the same time, the world is changing and we are facing a lot of constraints at the airports. So, despite being very focused on our individual businesses and markets, we believe that [the four member LCCs] can still do some sensible collaboration that doesn’t compromise the model.” For starters, U-Fly Alliance will enable the four founding Chinese LCCs to collaborate on the alignment of route networks, maximising efficient use of slot restrictions, and creating easy connections for travellers. At the moment, the alliance boasts a heavy North Asian presence, with all of the original carriers having bases in China – Hong Kong (HK Express), Kunming (Lucky Air), Urumqi (Urumqi Air) and Chongqing (West Air). Cowen said: “Each LCC will continue to be independent and build its network as it suits it and its customers, but you can see that it makes sense that we offer natural connections between LCCs without compromising on our business model.” Cowen revealed there have been discussions about a potential U-Fly Alliance frequent flyer programme, but warned that the LCC alliance would not emulate everything that the full-service carrier alliances (Star Alliance, Oneworld and Skyteam) offer. “[Establishing a frequent flyer programme] is something that we’re looking at in order to reward people who are continuing to travel with us. With the four LCCs working together, this becomes potentially an even more compelling [thing for us to do]. However, we’re not trying to copy the full-service airline alliances. We’re trying to establish an LCC alliance, which requires consistent characteristics between all airlines, including safety, quality and low fares.” The rollout of the U-Fly Alliance will happen in stages over the coming year. The alliance’s official website is set to undergo development, with an integrated booking engine to go online soon, which will allow customers to book journeys with all four LCCs on a single website. Cowen also stated that he expected more independent LCCs to join the U-FLY Alliance over the course of the year. “You’d love to know [which airlines will be joining the alliance], but I can’t tell you just yet,” he laughed. “But yes, we’ve been in a number of discussions with different LCCs, and we expect to have further announcements [of new members] throughout the year.” For more information, visit uflyalliance.com Clement Huang
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